Polymarket is tightening insider‑trading and manipulation bans across its DeFi app and CFTC‑regulated U.S. exchange, adding surveillance, NFA oversight and formal whistleblower channels.
Summary
- Polymarket rolls out enhanced market integrity rules for both its DeFi platform and CFTC-regulated U.S. exchange.
- New policies sharpen bans on insider trading, manipulation, and abusive tactics, backed by multi-layered surveillance and public reporting channels.
- Move comes as regulated prediction markets scale rapidly under U.S. CFTC oversight and institutional interest in crypto-linked event trading surges.
Polymarket has published upgraded market integrity rules spanning its DeFi platform and its CFTC‑regulated U.S. exchange, tightening prohibitions on insider trading, fraud, and market manipulation while formalizing reporting channels for suspicious activity. “Markets thrive on clarity,” said Neal Kumar, Chief Legal Officer of Polymarket.
“These rule enhancements make our expectations abundantly clear for every participant across both platforms and highlight the compliance infrastructure we have already built.”
The updated framework centers on three explicit categories of banned insider conduct: trading on stolen confidential information, trading on illegal tips, and trading by people who can influence the underlying event’s outcome. Participants are barred from using confidential information obtained in breach of a duty of trust, from acting on tips they know or should know are tainted, and from taking positions when they hold “a position of authority or influence sufficient to affect the outcome of the underlying event.” Beyond insider rules, Polymarket now highlights a blanket ban on spoofing, wash trading, fictitious transactions, front‑running, self‑dealing, information misuse, attempted manipulation, and other disruptive practices that undermine orderly markets.
On the U.S. exchange, enforcement rests on a multi‑layered surveillance stack: partnerships with “world‑class trade surveillance and technology specialists,” a control desk running real‑time monitoring, and a Regulatory Services Agreement with the National Futures Association to investigate and sanction rulebreakers. Sanctions for violators can include suspension, termination, monetary penalties, or referral to regulators and law enforcement. On the DeFi side, users can report suspected abuse via Polymarket’s Discord or by emailing [email protected], while U.S. exchange participants can file confidential complaints to [email protected].
The integrity revamp lands amid a broader regulatory turn in the U.S., where the CFTC has asserted exclusive jurisdiction over prediction‑market derivatives and is actively defining how event contracts fit under the Commodity Exchange Act. Polymarket already secured an amended CFTC order in late 2025, allowing intermediated access via futures commission merchants and binding the platform to full Designated Contract Market‑style surveillance, reporting, and self‑regulatory obligations. As one recent analysis put it, regulated platforms like Polymarket now “bet on transparency and on‑chain credibility” while competing against DeFi‑only venues that emphasize cost and self‑custody.
That regulatory clarity is arriving just as prediction markets post record activity. In February 2026, combined monthly volume on major platforms Kalshi and Polymarket hit roughly $18.6 billion, a new all‑time high, with more than $8 billion traded in just the first half of March. Industry observers argue that as event markets turn into an institutional‑grade information source for media, sports leagues, and financial firms, exchanges that can demonstrate credible surveillance and clear integrity rules will capture the most sensitive flow. “Our goal has always been to give fans new ways to engage with the sports they love while ensuring those markets can grow responsibly on a global scale,” Polymarket founder Shayne Coplan said in an earlier statement on the company’s broader integrity push.
